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Isn't entire retirement / pension system based on rent-seeking? Only tiny amount of people make enough money that they can stop working and retire without havin

Isn't entire retirement / pension system based on rent-seeking? Only tiny amount of people make enough money that they can stop working and retire without having to extract / take cut from economic activity / labour of younger working people (and cheap labour in developing world). How would you handle pensions other than rent-seeking via investment? Plus, as the population of western world is aging and there are more and more old people and less productive young people, the rent-seeking will only get worse. Much more people will be retired and will depend on getting cut from productive working people who will be squeezed more and more (higher taxes, longer hours, lower or stagnating wages). This can be alleviated to a degree by western corporations being global and exploiting cheap labour in third world but even that will be exhausted once the developing world catches up to western standard.

yorwba 9y ago
Sure, if you look at old people and young people separately, it appears that old people only take money out of pension funds and young people only pay into them. But the whole point is that young people eventually become old people. Old people receiving payouts isn't rent seeking, it's time-delayed compensation for their previous contributions. The changing demographics are certainly a problem, but assuming the population trends continue, today's young people aren't particularly worse off. Their pension contributions may be used for more than one old person, but once they become old themselves, the next younger generation will be in exactly the same situation.
brianpgordon 9y ago
An aging population is a huge problem, but not necessarily an unsurmountable one. Most of the gains in productivity since the industrial revolution have been due to working smarter, not throwing more laborers at the problem. Pension funds can continue seeing positive returns generated by general economic growth driven by technology and streamlined business processes.
TheCoelacanth 9y ago
Not all investment income is derived from rent-seeking. If you invest in a business that engages in rent-seeking, than of course, your investment is also rent-seeking. If you invest in a business that makes money by creating wealth, then that is not rent-seeking.

yorwba 9y ago

Sure, if you look at old people and young people separately, it appears that old people only take money out of pension funds and young people only pay into them. But the whole point is that young people eventually become old people. Old people receiving payouts isn't rent seeking, it's time-delayed compensation for their previous contributions. The changing demographics are certainly a problem, but assuming the population trends continue, today's young people aren't particularly worse off. Their pension contributions may be used for more than one old person, but once they become old themselves, the next younger generation will be in exactly the same situation.

brianpgordon 9y ago

An aging population is a huge problem, but not necessarily an unsurmountable one. Most of the gains in productivity since the industrial revolution have been due to working smarter, not throwing more laborers at the problem. Pension funds can continue seeing positive returns generated by general economic growth driven by technology and streamlined business processes.

TheCoelacanth 9y ago

Not all investment income is derived from rent-seeking. If you invest in a business that engages in rent-seeking, than of course, your investment is also rent-seeking. If you invest in a business that makes money by creating wealth, then that is not rent-seeking.